November 23, 2011

A Seat at the Internet Gaming Table

Indian gaming experts say there’s no need to amend the Indian Gaming Regulatory Act in order to give the National Indian Gaming Commission a regulatory role in any Internet gaming enterprises established by tribal governments.

The 1988 Indian Gaming Regulatory Act (IGRA) established the commission as the regulator of Indian gaming along with tribal governments. Since then there have been various threats to reopen IGRA for amendments – threats that tribal leaders have vigorously opposed for fear that opening the gaming statute would provide an opportunity for anti-gaming legislators to introduce amendments to limit Indian tribal governments’ ability to conduct gaming. But with the prospect of Internet gaming on the horizon, tribal leaders are pushing for a regulatory role for the commission and some leaders and legislators have questioned whether it would be necessary to open amend IGRA in order to authorize the commission as the oversight agency.

Spokesmen for the commission and for the National Indian Gaming Association (NIGA) say authorizing the commission to provide oversight to Indian gaming in cyberspace could be written into Internet gaming legislation. “I believe that responsibility is there with the commission. I don’t see why we would have to open up IGRA in order to do that.” NIGA Chairman Ernie Stevens Jr. says. “What we’re saying is that the commission has the experience and knowledge about Indian gaming and they’re the only ones who really have that kind of experience, and we think that would be more appropriate than having an outside agency oversee it.”

The issue of opening IGRA was raised in front of the Senate Committee on Indian Affairs at an “Oversight Hearing on the Future of Internet Gaming: What’s at Stake for Tribes?” November 17 when Sen. Al Franken (D-Minn.) questioned Larry Roberts, a citizen of the Oneida Nation of Wisconsin and general consul for the National Indian Gaming Commission. “If Internet gaming were made fully legal tomorrow and your commission would have a role in regulating tribal Internet gaming, do you think the IGRA would have to be rewritten in any way in order for the commission to take on that role?” Franken asked.

Roberts said it was a hard question to answer “in the abstract, because there’s no bill out there that provides roles and responsibilities for us so it’s hard to lay out whether it would actually have to be part of IGRA or not. It really depends on how Congress defines our role.”

Franken probed further. “But, I mean, if Congress were to say, ‘Okay, the Indian side of this is going to be regulated by IGRA,’ it would have to be in the legislation, obviously, right?” Franken said, referring to the legislation to legalize Internet gaming.

“Yes,” Roberts said, “and as with any legislation we would implement our statutory duties as Congress directs us to.”

Protecting IGRA from amendments is among a set of principles tribal leaders developed over the past two years, facilitated by NIGA. The principles establish ground rules for an Internet gaming bill that would meet tribal government interests and provide an even playing field between tribal and commercial gaming. They were developed in response to current Internet gaming proposals that Indian country leaders say give unfair advantages to commercial gaming in states such as Nevada and Arizona. The principles provide for protection for tribal sovereignty; give tribes the right to operate, regulate, tax and license Internet gaming; allow tribes to reach customers off the reservation; exclude tribes from taxes; protect existing tribal-state compacts, and provide economic benefits for Indian country.

The push to legalize Internet gaming is coming from the commercial side of the industry, primarily from the Poker Players Alliance, the American Gaming Association, and the gaming states of Nevada and New Jersey. Sen. Harry Reid (D-Nevada) tried to attach Internet gaming language to an Omnibus bill late last year, and Congressmen Joe Barton (R-Texas) and Congressman Jim McDermott (D-Wa.) have proposed H.R. 2366 and H.R. 2230, respectively. The existing proposals name the Department of Commerce and the Department of the Treasury as regulators of commercial Internet gaming.

Jason Giles, NIGA’s executive director and former general consul, argues that legislation to legalize Internet gaming could simply name the commission as the regulator of Indian Internet gaming. “You don’t need to go back into the legislation that created the Commerce and Treasury departments and amend those in order to give them a new role or responsibility,” he says.

While some tribes are eager for Internet gaming to get off the ground and others oppose all Internet gaming, tribal leaders agree—and insist—that they should have a major role in shaping any legislative proposals. Akaka strongly supports the tribal leaders’ involvement in the process. He noted that Indian gaming comprises approximately 43 percent of the entire $61 billion-plus gaming industry in the U.S. “That is why it is critical that the committee explore this issue to find out what it would mean for tribes and their traditional Indian gaming facilities,” Akaka says. “We must make sure that the unique circumstances surrounding tribal sovereignty are maintained in any legislation and we must also enable tribes to fully participate so tribes are on equal footing with their counterparts in the commercial gaming industry should any legislation be considered.”

Several legislators also support the nation’s efforts to be at the table and to protect tribal sovereignty. Sen. Daniel K. Inouye (D-Hawaii) wrote to Reid in October urging that tribes be treated fairly in any legislation the Senate majority leader might consider. “Tribes are sovereign governments and should be treated as such,” Inouye wrote. “They should have the authority to regulate, tax and operate gaming. . .  When Congress enacted IGRA in 1988, we intended to authorize Indian tribes engaged in gaming to use new technologies as they developed. Accordingly, Internet gaming has become a new market and tribes should have equal access to this market.”

John Hoeven (D- N.D.) wrote to Reid on November 14 in support of Inouye’s letter. He also argued for fair treatment of the tribes. “Historically, our country has recognized the importance of allowing tribal leaders to regulate this industry in a way that will meet the goals of promoting tribal economic development, tribal self-sufficiency, and a strong tribal government as outlined in IGRA. Congress should continue to respect tribal nations and their economies by treating them fairly during any Internet gaming discussions,” Hoeven wrote.

In October, Congressman Tom Cole (D-Okla.) wrote to the co-chairs of the Joint Select Committee on Deficit Reduction—the “Super Committee” that ended it’s work November 21 without reaching consensus on deficit reductions—urging the committee not to include Internet gaming provisions in the deficit reduction package. “While I do not support Internet gaming, if an Internet gaming regime is established, anything short of a comprehensive system developed through the regular committee process threatens the constitutionally recognized sovereignty of Indian tribes,” Cole wrote.

The current bills are clearly inadequate, Stevens says. “As they rolled this out they did it without respect for several aspects that are standard for tribal governments. We have to be treated as tribal governments. They have to understand and respect that we have a responsibility to our communities as we move forward because we’re not individuals, we’re not private investors. Our tribal governments’ economic development needs are in order to service our communities.”

Akaka has promised to analyze all potential impacts of Internet gaming on tribal nations. “I know there are many other tribes and affected stakeholders that we need to hear from as well. That’s why I intend to convene additional meetings about this issue so my colleagues and I can make sure we’re hearing from all interested parties representing tribal issues in this important matter,” he says. No further hearings have been scheduled.

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April 1, 2012

Keep Your NEPA Out of My Gaming Management Contract

One area of vital importance to many Indian tribes is the relationship of the Indian Gaming Regulatory Act (“IGRA”) to the National Environmental Policy Act (“NEPA”). The National Indian Gaming Commission (“NIGC”) requires Indian tribes entering into management contracts for gaming to comply with NEPA requirements when construction is involved. This position puts Indian gaming enterprises at a severe disadvantage to other businesses, which do not have to spend millions of dollars on NEPA compliance for the same project, nor undertake months or years of delay resulting from the NEPA process before beginning construction. The delay has the effect of outdating market analyses, dramatically increasing project costs, involving the general public in the sovereign decisions of tribal governments, and deterring potential investors.

The NIGC should be excused from compliance with NEPA because there is no way that tribes can complete full NEPA environmental reviews within the time period set out by Congress for the approval or disapproval of management contracts. Courts have found time conflicts excuse NEPA compliance. See Flint Ridge Development Co. v. Scenic Rivers Ass’n of Okla., 426 U.S. 776, 788-89 (1976). Continuing to require NEPA compliance for gaming management contracts is a waste of tribal, management contractor, and federal resources.

The completion of an Environmental Impact Statement (“EIS”) takes a considerable amount of time – from the Draft Environmental Impact Statement, review and revision in response to feedback, possibly publication of another draft, publication of a Final Environmental Impact Statement and publication of a Record of Decision. The average time for completion of an EIS is 3.4 years based on a 2008 study by Piet and Carole deWitt of 2,095 EISs prepared by 53 different federal agencies. This is very similar to a 3.6 year timeframe found by a 2000 Federal Highway Administration evaluation on environmental streamlining. On the two occasions when an EIS was required by the NIGC, for the Nottawaseppi Huron Band of Potawatomi Indians, it took approximately two years and three months to prepare a Record of Decision. The second occasion, for the Graton Rancheria, the NEPA process took approximately three and a half years from publication of the Draft EIS until issuance of the Record of Decision. Moreover, these time periods also are not adequate for the NIGC to consult with Indian tribes pursuant to the Commission’s government-to-government consultation policy.

The NIGC must approve or disapprove a gaming management contract within one hundred and eighty (180) days, with a possible ninety (90) day extension, or a tribe may sue to compel action under 25 U.S.C. § 2711(d). There is simply no way that a Tribe can complete an EIS within this period. As a result, the one hundred and eighty (180) day period allowed for approval or disapproval of management contracts in 25 U.S.C. § 2711(d) is far too short for the agency to comply with NEPA. The time limitations in the IGRA warrant the conclusion that there is a statutory conflict with NEPA.

Indian tribes have had the authority to build and operate gaming facilities on their lands prior to the enactment of IGRA. Under IGRA, an Indian tribe has the right to build and operate a gaming facility on its lands after adoption of a gaming ordinance approved by the NIGC Chairman — no federal review of the construction design, location, or site is required unless an opinion is needed that the selected site qualifies as Indian lands. See 25 U.S.C. § 2719.

Furthermore, NEPA was enacted to assist Federal agencies to ensure that significant environmental impacts are fully considered in the Federal decision-making process. Thus, under NEPA, an EIS should be created only when a federal agency, such as the NIGC, will be undertaking an activity that rises to the level of a major federal action which significantly affects the quality of the human environment. Department of Transportation v. Public Citizen, 541 U.S. 752, 763 (2004).

For Indian gaming management contracts, federal interest in the contract is slim, other than for enforcement of its gaming terms. When a management contract does involve construction activity, the NIGC has no ability to control or regulate the size, design, or construction of the project. Thus, no major federal action in involved in the Indian gaming management contract process, and therefore, NEPA compliance should not be required.

To further explain why no federal action is involved, the factors considered by courts to determine whether a project is a major federal action when a non-federal party is involved include: (1) whether the project is federal or non-federal; (2) whether the project receives significant federal funding; and (3) when the project is undertaken by a non-federal actor, whether the federal agency must undertake “affirmative conduct” before the non-federal actor may act. Mineral Policy Center v. Norton, 292 F. Supp. 2d 30, 55 (D.D.C. 2003).

An Indian gaming management contract is not a federally initiated, operated, or owned project.

The tribe has the sole proprietary interest and responsibility for the conduct of any gaming activity pursuant to 25 U.S.C. § 2710(b)(2)(A), and may begin construction of a gaming operation or offer gaming activities as soon as its gaming ordinance has been approved. The management contract is between two non-federal entities: an Indian tribe and a private company. The Indian gaming operation receives no federal funding; instead the tribe pays fees to the government to cover regulatory and oversight costs.

Even though a management contractor cannot begin work without federal approval, there has been reluctance to require NEPA compliance on actions “that are marginally federal” especially when no federal funding is involved. State of Alaska v. Andrus, 591 F.2d 537, 541 (9th Cir.1979). Moreover, NIGC approval of any construction or building terms in the management contract are outside the scope of the factors Congress requires the Commission to review. “[If] the agency does not have sufficient discretion to affect the outcome of [an] action, and its role is merely ministerial, the information that NEPA provides can have no affect on the agency’s actions, and therefore NEPA is inapplicable.” Citizens Against Rails-to-Trails v. Surface Transp. Bd., 267 F.3d 1144, 1151 (D.C.Cir. 2001). The NIGC is not in control of the project, nor may it exert significant influence on any construction or environmental mitigation terms of the gaming management contract. Sierra Club v. Hodel, 848 F.2d 1068, 1089 (10th Cir. 1988).

If the NIGC insists on that there is no statutory conflict and that major federal action is involved in management contract approvals, it can create a single programmatic EIS based on past experience that would support a categorical exclusion for tribal projects. Such an approach, called “tiering” is allowable by federal regulations at 42 C.F.R.§ 1500.20, and would save substantial time and money.

Considering these issues, NEPA should not apply to the IGRA based on statutory conflict and/or categorical exclusion. Furthermore, continuing to require NEPA compliance for gaming management contracts is a waste of tribal, management contractor, and federal resources.

Andrea Lord Goldstein is a Senior Associate with the law firm of Smith, Shelton, Ragona & Salazar, LLC, located in the Denver area, and a former Staff Attorney for the National Indian Gaming Commission.

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April 4, 2012

On Class II Gaming Regulations

The National Indian Gaming Commission (NIGC) recently published discussion drafts of a set of regulations for Class II. These are the first set of regulations for Class II put forth by Chairwoman Stevens and are the result of a strenuous consultation process and with the advice of a NIGC organized Technical Advisory Committee (TAC). All of this follows years of pain-staking hard work by the Tribal Gaming Working Group (TGWG). The good news is that this set of regulations did not come down off the mountain, as was the process in the recent past. This is not to say that some significant work is not needed to make this set of regulations workable for the industry and, most importantly, for the Tribal governments that are the primary regulators of Class II.

This set of regulations encompasses Technical Standards and Minimum Internal Controls (MICS). There is no doubt that Class II will be better off when these regulations are adopted and become the measuring rod for enforcement at both the NIGC and for Tribal regulators. This article is not intended to be a specific review of each provision; rather, it is meant to take a broader policy view.

The Technical Standards set the minimum requirements that manufacturers of Class II hardware and software must build into their products. This newest draft will modify existing regulations and will bring needed clarity and direction. A set of standards like these has long been a goal of the industry. It is my view that most of the provisions that ensure a viable and profitable Class II industry are contained in this draft. What is lacking is largely highly specific and requires that the NIGC give great weight to the comments that will come from the Tribal governments, Tribal regulators, the TGWG, and the industry.

The NIGC will benefit from the technical expertise that will be contained in many of the comments to be filed. I urge this NIGC to be open-minded to the considerable expertise offered. To do anything less may allow historical failings to overshadow an otherwise propitious record of regulatory reform, consultation, and collaboration.

MICS are the heart and soul of gaming regulation. Tribal government gaming has a proud and enviable record of regulation over the past 24 years since the passage of the Indian Gaming Regulatory Act (IGRA). Historically the role of the NIGC in fulfilling its oversight role has largely been successful, with some notable exceptions. The exceptions grew out of a fundamental misinterpretation of the language of the IGRA by the previous NIGC administration that lead to overreaching and a “policing” mentality. I point this out not to open wounds, rather to make it clear that there is no room to return to that failed view.

The work of the TAC and the consultations along with the comments that will be offered to the NIGC will shape a regulatory view that must define the fundamental role of the NIGC as defined by the IGRA – oversight. Tribes are the primary regulators of Class II gaming and must be fully accorded that role by the NIGC in all of its regulations, especially these Class II regulations.

The draft NIGC regulations are not consistent and appear to place the NIGC on equal footing with Tribal regulators. The IGRA, established law and the stated policies of this NIGC should support and strengthen Tribal sovereignty. Lest I be accused of overreacting, let me say I speculate that when all of the comments are in and when the NIGC has a chance to reflect, this concern will be remedied.

This set of NIGC regulations is a good start; we must make sure that the end product does not drift back to historically and legally unsupported conclusions. Groups like the TGWG along with the advisors to Tribal government gaming will continue their good work and focus on this issue as well as the details of the regulations.

I urge all Tribal governments and regulators to take the time to comment on this draft set of NIGC Class II regulations paying particular attention to the proper role of the NIGC.

Due date for comments is April 16, 2012. For more information, see the NIGC website at NIGC.gov.

Joe Valandra, Sicangu Lakota, is principal owner and president of VAdvisors, LLC, chairman and CEO of Tehan Woglake, Inc., and former chief of staff of the National Indian Gaming Commission.

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August 27, 2012

NIGA Chairman Remembers Immeasurable Impact of Stanley Crooks

This past Saturday, I was notified that Shakopee Mdewakanton Sioux Community’s Chairman Stanley R. Crooks began his journey to the spirit world. This comes only two days after my visit with him at the St. Francis Regional Medical Center in Shakopee, Minnesota.

Stanley Crooks was an outstanding leader, chief, and visionary. In his life and leadership, he exemplified the Dakota virtues of courage, respect, generosity and wisdom. Over the past twenty plus years, Chairman Crooks showed the courage to always stand up for Indian sovereignty in the Halls of Congress, the state capitol, and at home. Stanley always stood strong for the integrity of the Indian Gaming Regulatory Act, which he viewed as a modern day treaty.

Chairman Crooks respected his people, neighbors, tribal, state and Federal leaders, and they respected him. With his leadership and the Shakopee Mdewakanton’s generosity are legendary. Traveling through Sioux country, one can see Shakopee’s support for other Indian tribes–at Rosebud, the Turtle Creek Crossing Grocery Store; at Pine Ridge, Prairie Winds Casino, at Standing Rock, the new wing at Prairie Knights Hotel; and at Cheyenne River, the nursing home. These are just a few examples of his determination to support Indian country.

Chairman Crooks had a great vision for Indian country. As sovereigns we are part of the American family of governments and our children look forward to a bright future. He saw his people lifted above the constraints of poverty and instilled them with the strength and resilience that you see today for the Shakopee Mdewakanton Sioux Community. Chairman Crooks also had the wisdom to listen to others and respect their views.

Over the recent years, we had direct challenges to our efforts in Washington, D.C., and Chairman Crooks came in to outweigh these demoralizing threats by using his own voice to share the real benefits of Indian gaming. Time and again, Chairman Crooks demonstrated his unwavering leadership in support of Indian sovereignty. He called upon tribal leaders to develop a plan to educate Congress on the benefits of Indian gaming and the strength of tribal self-determination. His leadership was the backbone of the tribal government effort to defend Indian sovereignty.

Under his leadership, the Shakopee Mdewakanton Sioux Community members have approved community donations of more than $243 million to tribes and charitable organizations since 1996 and tribal loans of more than $450 million for economic development and community development. He served as Chairman of the Shakopee Mdewakanton Sioux Community for more than 20 successive years and was reelected for a new four-year term of office in January of 2012.

Crooks, who became the tribe’s chairman in 1992, was a national figure in Indian country, serving as the chairman of the Minnesota Indian Gaming Association for many years and the tribe’s representative to the National Indian Gaming Association, as well as to the National Congress of American Indians.

National tribal leaders selected Stanley Crooks for the Wendell Chino Humanitarian Award in 2005. This award recognized his commitment to the advancement of tribal sovereignty. And in 2010, they gave him the Chairman’s Leadership Award of Excellence for his environmental advocacy work. These awards are the highest honors NIGA gives to leaders dedicating their lives to making a better world for their people. Chairman Crooks has surely demonstrated that not just to his people, but also to his neighbors and other tribes.

Every time I visited with the Chairman, I walked away motivated and energized. As soon as I heard of his passing, I immediately notified my son, Brandon Yellowbird Stevens, councilman at Oneida Tribe of Wisconsin, who then informed our tribal officials. I then informed former Oneida Chairman Rick Hill. Chairman Hill, who previously served as Chairman of NIGA, made the introduction and developed my friendship to Chairman Crooks.

When I last saw Chairman Crooks, I assured him that we will stand united with our tribes and that his vision will continue with our leaders. He taught us well and I thank him for his knowledge and generosity. Today, you can feel the immeasurable impact he gave his people and to Indian country.

He was a leader for many and on behalf of the National Indian Gaming Association, we thank Chairman Stanley Crooks for his tenacity, quick wit and passion.

Ernest L. Stevens, Jr. is the Chairman and national spokesman for the National Indian Gaming Association (NIGA) in Washington, DC. Stevens is currently serving his sixth two-year term as the organization’s leader. NIGA, established in 1985, is a non-profit organization of 184 Indian Nations with other non-voting associate members representing tribes and businesses engaged in tribal gaming enterprises from around the country. He is an enrolled member of the Oneida Nation of Wisconsin. He and his wife of over 30 years, Cheryl, have five children, and 10 grandchildren.

Services for Chairman Stanley R. Crooks

Traditional All Night Wake will be held after 5:00PM Tuesday, August 28th , 2012, at the Tiowakan Spiritual Center, with Prayer Service Tuesday at 7:00 PM. All tribal leaders and officials will speak immediately following the Prayer Service.

Funeral Services Wednesday, August 29th, 2012 at 11:00 AM at the Tiowakan Spiritual Center. Officiating is the Reverend Marlene Whiterabbit Helgemo. The program has been finalized by the Crooks family. Pallbearers are Joseph Bathel, Jesse Crooks-Archambault, John Granlund, Alex Blue, Randy Crooks, and Lance Crooks.

Due to space limitations and the many people expected to attend services for Chairman Stanley R. Crooks, please be aware that seating inside Tiowakan Spiritual Center is limited and auxillary locations will be utilized. Parking at the Tiowakan Spiritual Center throughout the Wake and Funeral Services will be limited to immediate family members. Auxillary parking with shuttle will be available.

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